AAA OFFICIAL BLAMES HIGHER CAPE GAS ON LESS COMPETITION

It is cheaper to fill up your tank in St. Louis or Charleston than in Cape Girardeau.

Gasoline prices in the Cape Girardeau area Friday were about 17 cents higher than in the St. Louis and Charleston areas.

Regular, unleaded gasoline at self-serve pumps was selling for 89 cents a gallon in the St. Louis area.

That was up from Monday's 87.7 cents per gallon, the lowest it has been this year, said Michael Right of the AAA Auto Club of Missouri office in St. Louis.

In Charleston, gas sold Friday for 87.9 cents a gallon.

But in Cape Girardeau, regular, unleaded gasoline sold for $1.05.9 cents at most stations. A few stations were just under that price; one station on William Street was selling gasoline for $1.03.9 a gallon.

Why does gasoline cost more in Cape Girardeau?

Right attributes it to less competition.

"We are always accused of price fixing," said Jim Maurer, general manager of Rhodes Oil Co., which operates 15 convenience stores and service stations from Ste. Genevieve to Sikeston. But he and Bob Blank of Bi-State Oil Co. said Cape Girardeau stations aren't fixing prices.

"I don't think we are gouging anybody," said Blank, who operates two service stations in Cape Girardeau.

They said Quik Trip, a major operator with about 500 to 600 stations in the Midwest, has cut its prices in hopes of attracting customers.

As a result, other service station operators in the St. Louis area have followed suit to avoid losing customers, they said.

The St. Louis prices even affect the Rhodes station in Perryville.

Gasoline is $1.05.9 at Rhodes 101 stations in Cape Girardeau, but only 99 cents at the Rhodes station in Perryville.

Maurer said many Perryville residents work in St. Louis. "If we didn't have it at a lower price, we would lose more business," he said.

Lower gasoline prices aren't just an urban phenomenon.

Wallace Reeves owns Reeves Boomland at Charleston. He sells fireworks, souvenirs and gasoline, and operates a restaurant there.

Reeves said a competing service station lowered its prices at the pump over the past two weeks.

Charleston's seven other service stations followed suit. "If you want to stay in business, you have to keep up," he said.

The current price is probably the lowest it has been this year in Charleston, Reeves said.

Supply and demand affect price too. In winter months, people typically drive less. That can lead to a surplus, causing suppliers to drop their wholesale prices. Those savings often translate into lower prices at the pump, Blank said.

In the summer, when people typically drive more, there is greater demand for gasoline. Fuel prices commonly go up at that time of year.

Blank said the St. Louis area has more gasoline suppliers, which also could affect price.

In the Cape Girardeau area, there are two fuel terminals.

"We have had a little bit of a shortage here," Maurer said of fuel supplies.

Both Maurer and Blank said state and federal taxes add substantially to the price at the pump.

"We are one of the biggest tax collectors for the government," said Maurer. "Thirty percent of the cost of the product is going for taxes."

Federal and state gas taxes in Missouri total about 35 cents.

Maurer said wholesale costs fluctuate daily. As a practical matter, retail operators can't adjust their prices as often.

Maurer said the public views those in the oil business as a bunch of rich guys. But he said service station operators aren't making a killing.

"Generally, we try to shoot for a 10 to 12 percent margin over the whole year," Maurer said.

Rhodes and other oil companies have converted to convenience store operations to improve the bottom line, he said.